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Cruel Treatment

Working for Nike in Indonesia

Executive Summary

Over the course of 1999 Nike has put considerable resources into promoting the idea that it has reformed its labour practices in response to the global campaign against the company. A number of major newspapers have carried stories heralding this change.

What has been missing has been thorough independent research testing Nike¹s claims against the experiences of workers.

To address this, in September Press for Change commissioned the Urban Community Mission (Jakarta) ­ an organisation with 16 years experience working on issues facing Indonesian factory workers - to conduct this survey.

In all 4,000 workers from 13 factories were interviewed - 2,300 from 5 sportshoe factories producing for Nike; 1,200 from 6 clothing factories producing for Nike and 500 from 2 sportshoe factories producing for BATA. The workers from the BATA factories were surveyed for the purpose of comparison.

The survey results indicate that factories producing for Nike in Indonesia are still characterised by excessive and compulsory overtime, abusive management practices and inadequate wages.

Abusive Manager Practices

In most of the Nike contract factories surveyed workers are still subject to senseless punishments and extreme verbal abuse if they work too slowly or break other factory rules - 57% of Nike sportshoe workers and 59% of Nike clothing workers reported that they had seen workers being shouted at or subject to cruel treatment by their supervisors. The punishments include wage deductions, having their ears pulled, being pinched or slapped on the buttock, being forced to run around the factory or having to stand for hours in factory yards (being ³dried in the sun²). The verbal abuse includes the Indonesian equivalent of phrases like ³Fuck You!² ³You Whore!², and ³You Dog!².

Management practices appear to be less cruel in the BATA factories. Only 25% of workers reported that they had seen workers shouted at or mistreated and they only cited examples of verbal abuse rather than other forms of cruel treatment. When verbal abuse does occur the language is limited to relatively milder insults, along the lines of "You Fool!, You Idiot!, You're Lazy!, or You're Stupid!".

Excessive and Compulsorary Overtime

Interestingly, most Nike workers did not rate abusive treatment as their biggest complaint.

In the Nike contract factories (both sportshoe and apparel) the high pressure work environment was the most significant concern. For 1,555 workers the major complaint was being forced to work excessive overtime without breaks and for a further 344 it was the difficulties associated with getting permission for annual leave or menstrual leave. Another 136 focused on the pressures associated with the target system, under which workers have to get through a certain number of shoes or clothes each day.

Specific questions regarding the number of working hours were not included in the survey, but the Urban Community Mission knows from other contact with these workers that in a number of Nike contract factories workers are still being required to work more than 72 hours per week during peak periods.

The response of the BATA workers to this question suggests that they work under considerably less pressure than workers in the Nike contract factories. Only 15 of the 500 workers surveyed identified compulsory overtime as their major complaint and only 13 prioritised the target system.

Inadequate Wages

The next most significant issue is low wages ­ named by 607 Nike workers as their highest priority concern.

Nike has made much of its decision to raise wages for sportshoe workers in Indonesia in response to the economic crisis. This survey shows that these workers¹ wages have been raised above the legal minimum. The vast majority (84%) of Nike sportshoe workers interviewed indicated that they were earning a basic wage of between Rp. 251,000 ($US34) and Rp. 300,000 ($US41) per month for a standard 40 hour week. The legal minimum for the area is Rp. 230,000 ($US32) per month.

While positive, several things need to be kept in mind with regard to these wage increases:

In the BATA factories most workers are being paid wages equal to or better than those being paid to Nike sportshoe workers - 42% of the workers surveyed were earning a basic monthly wage of more than Rp. 300,000 ($US41) per month, compared with only 16% of Nike sportshoe workers.

However, 44% of the BATA workers surveyed are on very low pay, earning less than Rp. 250,000 ($US34) per month. Historically the BATA factory has produced relatively cheap sneakers for the local Indonesian market, but several years ago BATA started to produce expensive sportshoes for export on a contract basis. In order to compete for these orders, BATA employed temporary contract workers for this work and paid them at a lower rate. It may be that the workers surveyed who indicated that they are on this very low rate of pay are casual or temporary workers producing other brands, but more research is needed to ascertain this. In any case, these wages are appallingly low, and BATA should increase them.

Other Issues

Issues prioritised by other workers included excessive heat in the work rooms, lack of drinking water, lack of medical and other facilities, non-nutritious food in factory canteens, lack of a social security system and lack of transport from the factory when workers are forced to work late. The survey also highlighted the short term nature of the employment being provided by these factories.

Potential Benefits

One survey question considered the potential benefits which companies like Nike could bring to the Indonesian economy if they paid decent wages.

According to UNICEF, 2 million young Indonesians had to leave school in 1998 because of the economic crisis. In 1999 it is predicted that 10 million children will be unable to continue school, because of school fees (in the order of $US3.50 per month) and because they must work in the informal sector to help their families get by.

Survey responses indicated that the 3,500 Nike workers had 6,572 younger siblings back in their home villages. This suggests that if all sportshoe workers in Indonesia were paid enough to enable them to make a decent contribution to their families¹ budgets it would dramatically increase the chances of several hundred thousand young Indonesians staying in school.

Worker Representation

The overwhelming majority of workers surveyed (93% of Nike sportshoe workers, 99% of Nike apparel workers and 94% of BATA sportshoe workers) indicated that neither the Indonesian government nor the official government union SPSI had ever helped to solve any of the problems facing workers.

Since independent unions became legal in 1998 a number of new unions have attempted to begin operation in Nike factories but there has been strong resistance from factory management and a number of workers have been fired for getting involved.

The Urban Community Mission (Jakarta) and Press for Change believe that allowing workers to form their own organisations and to bargain collectively is by far the most effective way of ensuring that this abuse and exploitation is finally brought to an end.

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